Do new 'energy efficient' appliances really cut bills?

As energy bills continue to climb, the government is hoping a new generation of energy-efficient domestic appliances will help households keep their bills down. So just how ‘green’ are these new white goods and will energy efficiency in the home really be enough to offset energy price rises?

In autumn last year, each of the UK’s ‘Big Six’ energy companies increased their prices by more than 8%. Now even smaller players such as the Co-operative and OVO have announced they are to crank up costs by around 9% and 6% respectively and, with the cost of fossil fuels and networks likely to push up costs further in the longer term, now’s the time to take control of our own bills. But should this start with energy efficient appliances? We take a look.

Making sense of the EU energy efficiency ratings

European Union (EU) law stipulates that all new appliances, from televisions to tumble dryers, must display energy efficiency labels, like the one on the left, to highlight just how energy efficient the product is.

The idea is that, as consumers, we can then use these labels to make a more informed choice when buying appliances, and base our decision upon how energy efficient a product is to save money in the long run.

This should then give manufacturers the incentive to develop and invest further in energy efficient product design, which should, in turn, also help to keep prices competitive.

So what do these ratings actually mean?

In light of the fact that manufacturers are continually improving the energy efficiency of their products, a new ratings system was introduced which actually has four separate ‘A’ ratings, the best of these being ‘A+++’.

There are potentially big savings to be made by choosing one of the higher graded appliances as even an A-rated appliance often costs twice as much to run as an A+++ rated one.

In 2010, the labels were updated to include more specific data on things such as energy consumption and the level of noise emitted to help us decide between appliances that have the same efficiency rating.

Making use of energy efficient appliances

The last 40 years has seen the number of electrical appliances entering our homes increase by almost 30%, with the average UK household now owning as many as 41 electrical products. As a result, monthly energy bills are being bumped up, increasing the need for energy-efficient appliances.

Cooling appliances currently lead the way as they are on average 49% more efficient than they were 20 years ago. So how much money could using one of these energy efficient appliances save us?

A recent study from Global Action Plan, a UK environmental behaviour change charity, found that if all UK consumers who purchased an A rated fridge-freezer in 2011 had instead bought an A+++ rated one, those households would have saved a total of £24million.

That’s a saving of about £24 per year per household.

In addition, this would have saved 100,000 tonnes of carbon over the course of a year, which is the equivalent of taking 33,000 cars off the road.

When this figure is multiplied over 15 years (the expected lifetime of a fridge-freezer), this would generate a monetary saving of £360million and enough energy to power 51,000 UK homes for a year.

Remember – this is just from buying an A+++ rated fridge freezer!

However, while the environmental benefits look impressive, the monetary savings don’t capture the imagination quite as much.

For instance, the purchase price of an A+++ appliance is usually around 50% higher than that of an A+ appliance. This means we will really have to be in it for the long haul to make our money back and it’s doubtful that the savings, even combined over a few appliances, will offset rising energy prices, particularly if providers are going to insist upon annual increases upwards of around 8%.

But hopefully more manufacturers will follow the example of Samsung, which is offering up to £150 cashback on selected appliances, and produce incentives to upgrade our equipment to more energy efficient models.

Cutting energy bills down to size

If you’re looking to lower your energy bills, the first step is to find out whether there is a cheaper tariff out there for you. The simplest way of doing this is to use MoneySupermarket’s comparison service. All you need to do is enter a few details about yourself and your energy usage and you could save as much as £222.78 a year.

Avoiding leaving appliances on standby and not leaving things such as phone or laptop chargers plugged in will mean you stop wasting energy too, and could save you around £35 per year according to the Energy Saving Trust.

Furthermore, the Department of Energy and Climate Change claims that if the UK was a more energy efficient nation and we only used the energy we needed, this would save enough energy to mean that we’d need 22 fewer power stations.

There are also those old tried and trusted techniques of only using your washing machine when you have a full load and only boiling the amount of water you need rather than filling the kettle to the brim. For more energy saving tips, read Mark Hooson’s article Top tips to save energy and slash your bill.

Energy prices could also fall if plans for more widespread shale gas extraction go ahead, particularly given that it was announced in this year’s budget that shale gas will be subject to a new tax regime.

And given the news from researchers at Durham University that ‘fracking’ – or hydraulic fracturing, the process used for shale gas extraction – is not a significant cause of large earthquakes, then this could give the green light for large scale extraction.

However, while shale gas extraction has led to a 50% reduction in gas prices over the last four years, it’s unclear as to whether or not it will have the same effect on UK prices – and then there’s the issue of gas extraction moving from the North Sea to, effectively, our back yards.